Reinventing an Entire Industry

The irony of discussing and debating issues of relevance to gaming these days is that there is no one single “video game industry” to speak of; you’re actually talking about dozens of individual and equally diverse businesses. Likewise, endlessly opining about when retail software revenues will cease slumping is all but irrelevant, as outside of specific tentpole AAA releases, the field’s mot promising growth areas (social, mobile, free-to-play, etc.) are all digital. But don’t take it from us: Just ask today’s most accomplished business leaders and game designers, who feel it’s high time that we finally woke up and realized that both the field, and fundamental playing habits, have permanently changed.

It’s a topic we explore in-depth here in the debut episode of Game Theory, which takes a deeper, more informed look at the topics and trends which shape today’s interactive entertainment sector. Offered alongside our eponymous new online magazine, which you currently have the pleasure of reading, the pair provide industry leaders with a more enlightened public forum through which to address today’s top concerns, including the magnitude of the changes currently rocking the interactive entertainment market. Their biggest immediate worry: Surviving the complete and utter transformation of a business that once was dominated by packaged goods to a new paradigm ruled by downloadable, online, social, community-driven and service-based offerings.

To put things in perspective, we turn to Electronic Arts founder Trip Hawkins, who sums matters up succinctly: “I’ve never seen a period like this – there’s so much disruption. The industry is really being turned inside out.” Maybe so, but as you’ll see in the above video, it’s also one poised to elevate new captains of industry, and potentially leave even the field’s most iconic firms capsized in its wake. Consider it a simple reminder – rather than focus on random fancies such as motion controls and 3D special effects, perhaps we’d all do well to remember that behind the scenes in 2010, there’s a much larger game at stake.

About Scott Steinberg
Scott Steinberg is CEO of strategic consulting and product testing firm TechSavvy Global, and a noted keynote speaker and business expert. Hailed as a top tech expert and parenting guru by critics from USA Today to NPR, he’s also an on-air analyst for ABC, CBS and CNN.

18 Comments

  1. Fantastic, thank you for the video, and for the blog. Keep em coming!

  2. Scott,

    Love the info and everything, but you need to slow yourself down just a tick. You obviously know your stuff, but rambling it out and hyper speed doesn’t do those of us trying to listen and learn any favors.

    Keep up the great work.

    Cheers

  3. The script is nice, and you sound confident enough delivering it, but you are speaking too fast.

  4. A lot of people talking about games but not a single GAMER talking about games.

  5. Charles Manson

    The whole point of these videos is that they give insight from the perspective of the game industry, not gamers. If you want to hear opinions of gamers, go to one of the million other websites created by gamers.

  6. I’m glad someone is going to be addressing the deeper themes at play in the industry, instead of being just another voice screaming “Omigod omigod omigod, this game is so KEWL!”

    BUT…

    I just tuned in to watch ‘Game Theory’, and I have to say I find it almost impossible to watch. I can’t stand the freaky pseudo-interference transitions. Whatever happened to the idea that cuts should be simple and clean. If I wanted the image to flicker and go fuzzy every five seconds I’d be watching it on a freaking 1950s TV that I’d spilled coffee on. This is 2010 – we don’t need edgy glitch graphics whenever the scene changes from one talking head to the next.

    Jeez, I thought we were over this sort of nonsense after all those complaints about shaky cameras making them sick in movies like Cloverfield.

    Honestly, I don’t mind a few edgy ‘glitch’ transitions during a show, but when I’m watching a guy talk for just fifteen seconds, and the image flickers three separate times without the camera position changing, that’s just too much! I mean, since I started typing this, I sat through the whole show, and I swear I must have seen 50 glitches. It’s ridiculous. I can see people getting epileptic seizures from this nonsense.

  7. @Ian Cooper: Nice rant. Have you thought that this is a small group with a limited budget. They may not have the best video editor out there. Give them some time. I’m sure as the popularity and funding gets its foot on the ground that things will get better.

  8. Yes there is change, but then again… not enough! Game developers just need to get over all this “casual” and “motion control” crap. All the shovelware and all these Wii-wannabes need to get over themselves and move onto the next innovation. Social gaming is something new and that has potential. The big 3s need to look into this more.

  9. A limited budget would not produce that garbage. The cheapest transition is a straight cut or a fade to black. It takes real money to put in a fake interference + white noise signal.

    Trust me, this is caused by throwing TOO MUCH money at overzealous cutters and editors. It’s certainly not caused by limited budget or hiring a merely crappy editor. After all, it’s not as if the video editor has the final say regarding what transitions to use.

  10. @Andy

    Are you saying Chris Taylor, Will Wright, Cliff Blezenski, Richard Garriot etc. are not gamers? Or did you mean your average gamer who has small grasp if that on how the industry works. This isn’t an industry that they just worked in, they created it. So I’ll trust their opinions and insights well before I ask the average gamer what they think.

  11. I still think they are fundamentally looking at it wrong.
    It’s happening with games what happened to Hollywood, too much money flying around ans nobody smart enough to make good use of it.
    You can say what you want about the cost of games these days, but there is absolutely no reason for a game to cost 90milion dollars to be made. We constantly see games that cost less than 1% of that are more fun, more imaginative and 100 times more interesting than most of the blockbusters.

    Instead of making a sequel every year, make it 2 years, it gives you a better chance to actually get a better product out, which increases potential sales and hype (hype sells a lot, you all know that). The trick here is that you actually need to have a good product and care about it past the $ sign.

    I for once would like to see a realistic depiction of were the money goes to when making a videogame. We hear it all the time that it is very expensive to make videogames, but thats it.

    I hate to bring Hollywood back again, but it sure looks like everything gaming wise is going in that direction and i cant see for the life of me, why would someone base the evolution of an industry in a already proven faulty module.

  12. Scott, would you mind to provide the youtube link for the video, bcoz my internet connection are slow like a snail to live stream the vid. So I need to download it first before I can watch it.
    Thanks!!

  13. @Miguel,

    This industry, like every other industry, is primarily driven by the consumer, and the consumer now has extremely high expectations. Indie games can be profitable, but the average gamer loves to play AAA blockbuster releases with complex storyline and realistic graphics (even I love to play them).

    There is definitely a room for the Independent developer, especially as people get tired of playing FPSs and traditional genres that can’t risk trying out new innovations in gameplay because it costs too much money to make a mistake. But the state of the industry as it is now will probably persist. I have the feeling that there will be fewer blockbuster titles every year, with development teams of hundreds of people, and we’ll see smaller companies flourish with the evolution of development tools, as well as smaller platforms with hardware constraints (3DS, iPhone).

    It is an exciting time to be in the games busines…

  14. The talented developers in the industry have been displaced to a point where costs are definitely conflicting with innovation and artistic originality.

    The real issue is a lot of the talented developers in the industry have been recruited by huge companies to work with code monkeys rather than to really draw out their own ideas in their entirety.

    The industry puts so much pressure on mass marketing and audio/visual benchmarks that the time, effort, and focus spent on creating fun, engaging, and memorable story and gameplay is no where near what it used to be.

    During the next generation of consoles you will probably find yourself looking back at this generation of games and will be troubled to think of any games that really stand out (a lot of sequels and rehashes).

    Where most the talent has moved over the years:
    1970-1985: PC/Atari 2600 (The Original Boom and Crash of Video Games)
    1985-1989: NES (Resurrection of the Videogame Industry)
    1989-1995: SNES/Genesis (Golden Age of Cartridge Games)
    1995-2000: Playstation/Saturn/Dreamcast (Compact Disc Games Boom)
    2000-2006: Playstation2/GameCube (Cost rising but still stable enough for innovative games)
    2006-2010: Developers are spread thin across many platforms (to appeal to more markets) with high costs (Trading innovation for sequels, ports, remakes, and “production value”)

    The developers need to get their finances in line and start making cuts where they are actually effective and needed. Many have noticed they have been cutting content and selling its as DLC – this is the wrong place to cut cost as it also cuts value.

    Some ways to cut costs:
    -use no name voice actors or no voice acting at all
    -program for a lower native resolution and just have the hardware upscale it
    -manage a marketing budget proportional to the actual cost of development of the game
    -Cut FMVs out or use in game engine to produce cinematics
    -downsize teams and redundant management
    -use a stylized approach to cut cost further

    Example: Demon’s Souls broke even on costs after selling only 75,000 units in the U.S. and the game looks and plays pretty nice.

    Following this, you would have the original gameplay, story, probably more content since it is less costly, and the development cost would PLUMMET! You could have sales figures half as large and make MORE profit!

    *Sigh* Sometimes I think common sense is the least common of all the senses…

  15. Part of my job is to search for valuable information about the business side of the game industry. Thanks for making that job easier! Keep up the good work.

  16. The change is driven by consumers. Don’t get me the dinosaurs that make money in the industry, get me a guy that has been playing games since Amiga. Therein lies real value. The cooments in this video can be sketched by any mid range MBA student.

  17. i guess we could have a totally different perspective on that issue in europe: especially in germany and france we got a long tradition of federal and regional financial support for all kinds of cultural products (like films, theatres, operas, literature and so on). that concept of public financed culture was critisiced in the last years for mostly selling for conservative culture (like theatre and opera) or lots of bad movies. but know we should rethink the concept and the possibilities coming along with it. public financal support for computer games could have 1. a large impact on the industry’s policies (not always for the best) and 2. saving lots of jobs there (what should be a good thing, i guess).
    the only thing is, that the german, french and european goverments oversee this possiblity to make europe the new major place for the game industry.

  18. Very well produced video with some clear point – I think the message got through.

    We’ve all heard the word “revolution” being shouted left and right – it’s a term that market prophets and marketing salesmen equally love to use. All the time. Most of the time it’s just a way for those people to say “hey! look at me – I’m saying something I myself think is important”. It usually isn’t.

    However, having highly respected game developers and market analysts say pretty much the same thing sorta ties the message back to the earth. Very good video. I was kind of scared on behalf of the industry.

    On topic though, I think I have to disagree somewhat with what Pacther said – just taking money from online services is NOT the way out of this situation, and I fear that big corps like EA and Activision/Blizzard is going to milk that cow.

    AAA-titles not profitable? Then maybe you’re doing it WRONG. Why does a 6 hour game *coughmodernwarfarecough* cost 40-50 MILLION DOLLARS to produce?
    It seems to me that a large part of the industry focuses on the wrong aspects of gaming… but then again, I’m sure they have their reasons and a professional opinion which I would listen to more than I would listen to me, if I were in their shoes…

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